Good morning. Germany’s financial regulator advised Binance to withdraw its license application over concerns about its founder and the crypto company’s complicated structure, according to people familiar with the decision and an internal Binance document viewed by The Wall Street Journal.

• Why did the regulator recommend this? BaFin, the regulator, believed Binance’s founder and ultimate owner, Changpeng Zhao, wouldn’t pass a “fit and proper” test, which looks at whether people are professionally and reputably apt to run or own a business it supervises. It also believed Binance’s structure hindered regulatory supervision, according to the people and the internal document discussing key topics related to Binance’s global licensing efforts. 
   
• Comment from Binance: A spokesman for the exchange said the Journal’s reporting was inaccurate. He said Binance proactively withdrew its application for a number of reasons, including as it concentrates its efforts on gaining a new European Union crypto license.
   
• Facing questions from U.S. authorities: The Securities and Exchange Commission last month accused Zhao of running an illegal exchange in the U.S., misleading regulators and manipulative trading through a company he owns. He and Binance deny the allegations. In the U.S., it also faces a continuing criminal investigation from the Justice Department.

Binance’s withdrawal has been previously reported, but the concerns of BaFin, one of the world’s key financial regulators, haven’t been. A spokesman for BaFin confirmed that Binance has withdrawn its application but declined to provide further details.

Lawmaker calls for House hearing on telecom lead cables.

A House lawmaker requested a congressional hearing about lead-sheathed cables that telecom companies have left behind across the U.S.

In a letter addressed to the chairs of the House Energy and Commerce and the House Transportation and Infrastructure committees, Rep. Pat Ryan, a New York Democrat, asked that the chief executives of major telecom companies answer questions about, among other things, the location of lead cables and plans for mitigating any risk.

A Wall Street Journal investigation recently revealed that AT&T, Verizon and other telecom companies have left behind more than 2,000 toxic lead cables on poles, under waterways and in the soil across the U.S. Journal testing near such cables showed that dozens of spots registered lead levels exceeding EPA safety guidelines.

The Financial Stability Oversight Council, a panel of top regulators that monitors financial system stability, said its staff are focusing on the impact of climate-related events on the real-estate market. Events like wildfires and flooding can reduce the value of real estate and increase underwriting costs for insurers, which can have spillover effects in the broader financial system and economy, FSOC said in a staff progress report released Friday.

• A New Jersey bankruptcy judge threw out the second chapter 11 case that Johnson & Johnson filed to resolve its mass talc liabilities, again shutting down the healthcare-product company’s plan to achieve an $8.9 billion settlement.
   
• Into its deal to license its content to generative-AI company OpenAI, the Associated Press built in a first-mover safeguard: A “most favored nation” clause that gives it the right to reset the terms if another company gets a better deal from OpenAI, according to people familiar with the agreement.
   
• Federal regulators are proposing stricter fuel-economy standards for light-duty cars and trucks, saying the revamped rules would save consumers money at the pump and reduce pollution.
   
• A federal judge has temporarily blocked Arkansas from enforcing portions of a law that would restrict which books can be made available to children.

While everyone else fights inflation, China’s deflation fears deepen.

Signs of deflation are becoming more prevalent across China, heaping extra pressure on Beijing to reignite growth or risk falling into an economic trap it could find hard to escape.

What's at stake. While the rest of the world tussles with inflation, China is at risk of experiencing a prolonged spell of falling prices that—if it takes root—could eat into corporate profits, sap consumer spending and push more people out of work. Its effects would ripple across the globe, easing prices for some products that countries like the U.S. buy from China, but would also deprive the world of important Chinese demand for raw materials and consumer goods, while also creating other problems.

• Taiwan Amps Up Chinese-Invasion Drills 
• Europe Avoids China’s Belt and Road Forum
• China’s Tech Distress Grows as U.S. Chip Sanctions Bite
• China’s Economic Recovery Weakens as Growth Concerns Linger
• Analysis: Beijing Is Still Too Confident About China’s Economy

Inflation and wage growth ease as Fed considers next move.

Pay and price pressures showed fresh signs of retreating from the economy, adding to evidence that inflation is moving closer to the Federal Reserve’s goal.

Improving conditions. Employers spent 4.5% more on wages and benefits in April to June from a year earlier, the Labor Department said Friday. That marked a slowing from a 4.8% increase the prior quarter. The employment-cost index, a measure of compensation growth closely watched by Fed officials, also posted its smallest quarterly increase in two years.

• How the U.S. Economy Is Sticking the Soft Landing
• Why the Drivers of Lower Inflation Matter

• Flanked by Russia’s defense minister and a Chinese Politburo member, Kim Jong Un smiled as North Korean missiles capable of reaching the U.S. mainland rumbled through the streets of downtown Pyongyang.
   
• Once a lonely and largely impassable maritime expanse where countries worked together to extract natural resources, the Arctic is increasingly contested territory.

• Yellow, one of the oldest and biggest U.S. trucking businesses, shut down on Sunday, wrecked by a string of mergers that left it saddled with debt and stalled by a standoff with the Teamsters union.
   
• Walmart has paid $1.4 billion to buy out a large investor in Flipkart, further cementing its control of the Indian e-commerce giant.
   
• Russian authorities said they downed three drones targeting Moscow early Sunday, in an attack that Russian state media said injured one person and forced the temporary closure of one of the capital city’s main airports.

• Home insurers are insuring less and charging more as they try to claw their way back to profitability after losing money in five of the past six years, analysts and insurance agents say.

• How nice should you be at work?

Follow us on X at @WSJRisk. Follow Risk & Compliance editor David Smagalla @DSmagalla_DJ and reporters Mengqi Sun @_MengqiSun, Dylan Tokar @dgtokar and Richard Vanderford @VanderfordRich.

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